A company that specializes in odor control made deposits of PhP 10,000 at the end of year 2, PhP 25,000 at the end of year 3, and PhP 30,000 at the end of year 5. Determine the future value (in year 7) of the deposits at an interest rate of 8% compounded monthly.

A company that specializes in odor control made deposits of PhP 10,000 at the end of year 2, PhP 25,000 at the end of year 3, and PhP 30,000 at the end of year 5. Determine the future value (in year 7) of the deposits at an interest rate of 8% compounded monthly.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

See similar textbooks

Related questions

Q: Standard Chartered Bank Berhad pays 7 percent annual interest on its fixed deposit account, whereas…

A: Deposit = 5000 Standard Chartered Bank Annual Rate = 7% Time Period (N) = 8 years UOB Bank…

Q: Suppose an individual makes an initial investment of $2500 in an account that earns 7.8%. compounded…

A: Given information: Initial investment is $2,500 Interest rate is 7.8% Number of periods is 12 made…

Q: You borrowed money from the bank with a simple interest 8%, find the present worth of P25,000, which…

A: In Simple Interest Case, FV = PV + (PV x r x n) FV = PV x {1 + (r x n)} Therefore, PV = FV / {1 + (r…

Q: You agree to make 24 deposits of Php500 at the beginning of each month into a bank account. At the…

A: An annuity is a series of cash flows with a fixed amount at equal time intervals for a specific…

Q: Suppose a certain manufacturer deposits $3,000 at the beginning of each 3 month period for 8 years…

A: Gien Information, Deposit = $3,000 Interest Rate = 8% Compounding Frequency = quarterly Formula…

Q: Mr. Samal deposits 5,000 php at the end of each month at a product with an interest rate of 8%…

A: In the given question, compounding is done on monthly basis. Therefore, effective monthly rate will…

Q: Find the compound interest earned if PhP 30,860 is deposited in a bank at 2.8% compounded monthly…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: Suntech Distributors, Inc., deposits $4,000 at the beginning of each 3-month period for 7 years in…

A: Formula: A = P [ 1 + ( r / N )NT ] Interest : Interest is a fee charged on the borrowed amount.

Q: Alpha Ltd invests £45,000 and after 9 years it has received £62,300. The interest rate the bank…

A: The future and the present value of the investment are given. The future value is calculated using…

Q: A company borrowed at 7.21% compounded annually to purchase equipment, agreeing to make payments of…

A: Time values tell that money received today is of more worth than that of receiving the exact amount…

Q: Suppose a certain manufacturer deposits $3,000 at the beginning of each 3 month period for 6 years…

A: a) The question gives the following information:

Q: y Company purchased some machinery and gave a five-year note with a maturity value of Php20,000.…

A: Solution: Time = 5 Years (N) Maturity Value of Note = $20,000 (A) Method of Discounting- Monthly (12…

Q: A businessman wants to borrow P1,000,000 from a bank that charges a rate of interest of 12%…

A: The given problem can be solved using PMT formula in excel. PMT formula computes payment /…

Q: CNB, Inc. will deposit $25,000 into a money market account at the end of each year for the next…

A: The present value method is used to evaluate the different levels of investment projects. With the…

Q: Bennington Company has borrowed a certain amount from the bank that it will repay in 24 monthly…

A: The term mortgage loan represents the amount borrowed by one person to acquire a house or other real…

Q: (c) A motor vehicle which costs RM20,000 was bought on credit terms, with payment of 10% as deposit…

A: To find the Interest expenses we will use the following formula: Compounded Total Interest = P *…

Q: borrowed Php200,000 from a local bank having an interest of 8% per annum, compounded monthly. If the…

A: Loans are to be paid by the equated monthly payments which carry the payment of principal and…

Q: An accountant wants to withdraw $30,000 from an investment at the beginning of each quarter for the…

A: Time value money is the concept widely used by the management and individual to determine the…

Q: A company financed the purchase of a machine with a loan at 4.25% compounded semi-annually. This…

A: Solution:- When a loan is taken, it can either be repaid as a lump sum payment or in installments.…

Q: Your company borrows $500,000 from a bank to finance the purchase of a new machine. The nominal…

A: First let us calculate the 4 equal half yearly payments that need to be made. This can be calculated…

Q: XYZ Bank pays simple interest of 2% with quarterly compounding for deposits in their savings…

A: LIFO method is also called Last -In first out method. Under this method money that is deposited at a…

Q: Tedros borrowed $2 million and planned to repay the loan by making equal month-end payments over a…

Q: ABC Limited has a notes payable of $50,000 which will mature in five months. Management has both the…

A: Option B is the correct answer.

Q: A company expects a series of 24 monthly receipts of PHP3,600 each. The first payment will be…

A: Present value of annuity is determined on the basis of present annuity factor that takes in account…

Q: A company deposits $2.000 In a bank account at the end of every year for 10 years. If the bank pays…

A: The future value of annuity is the accumulated value of regular deposits at a given interest rate.…

Q: A small manufacturing company borrowed $1 million and repaid the loan through monthly payments of…

A: Goin in the interest rate on loan - It is the internal rate of return required for the present value…

Q: Suppose an investor plans to make monthly deposits into an account that pays 9% interest, compounded…

A: Here we will use the formula to calculate the amount to be paid monthly. We will take the period as…

Q: Suppose that you make 12 equal annual deposits of Php 2,000 each into a bank account paying 8%…

A: Annual deposit (P) = Php 2,000 Annual interest rate (R) = 8% Number of annual deposit (N) = 12

Q: A corporation has decided to use borrowed capital to finance a portion of an equipment purchase. The…

A: Loans are the debt obligations of a company that are shown on the liabilities side. These are paid…

Q: A company that specializes in odor control made deposits of PhP 10,000 at the end of year 2, PhP…

A: The future value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Q: Zara Corporation borrowed RM100,000 from their bank for one year. The bank required the company to…

A: Effective rate of interest is the cost of borrowing money from the bank after making all the…

Q: To finance the development of a new product, a company borrowed $29000 at 4% compounded monthly. If…

A: Solution:- When a loan is taken, it is to be repaid in lump sum or in installments. If it is paid in…

Q: A man owes Php 15,000 with interest at 8% payable semi-annually. Equal payments at the beginning of…

A: Firstly we shall calculate the Semiannual payment using Excel's =PMT formula Then we shall prepare…

Q: A debt of Php 150,000 is to be amortized by ten semi-annual payments, the first to be made 6 months…

A: Loan Amortization: A simple definition of amortization is the amount of principal and interest that…

Q: A man borrowed an amount of P150,600 to bank that offers an interest rate of 5.36% compounded…

A: Loan is a borrowed amount of money for a fixed time period, which is expected to be repaid with…

Q: A pair of earrings is priced at P30,000. A client made a down payment of P5,000 and promised to pay…

A: Price = P30,000 Down payment = P5,000 Balance (PV) = 30,000-5,000 = P25,000 Interest rate = 3%…

Q: Canliss Mining Company borrowed money from a local bank. The note the company signed requires five…

A: Canliss Mining Company borrowed amount equals to Present value of all future payment of 10000 at the…

Q: MACY’S has a six-year term deposit that will pay 7% per annum compounded quarterly. If $125,000 was…

A: Here, Invested amount = $125,000 Interest rate = 7% No. of compounding periods in a year = 4 Term…

Q: A man borrows Php 64,000 from a loan association. In repaying this debt, he has to pay Php 4000 at…

A: Given:

Q: A customer has to pay an amount (principal + interest) of PhP 32,230 as a pay a personal loan at the…

A: Today value of money required will be that loan without interest.

Q: Suppose an individual makes an initial investment of $1400 in an account that earns 7.8%, compounded…

A: Future value of a cashflow is the present value of the cashflow compunded at future date at…

Q: 1. If P5,000 is invested in a time-deposit for 2 years in a bank that offers 4% annual interest…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: Libra Ltd borrowed $120 000 from its local bank to finance their operation. Annual payments are…

A: Calculate the annual payment as follows: Annual payment = (Amount *Rate)/(1-(1+rate)^-years)

Q: Reya placed Php 18,000 in a 240 day term deposit earning 8.5% per annum. How much will the bank pay…

A: Principal ,P= Php 18,000 Time,t = 240 days Rate of interest, r= 8.5% Taking 365 days in a year for…

Q: If a nine month term deposit at a bank earn a simple interest rate of 9% per annum, how much should…

A: Term deposit is a way in which the person locks his amount or we can say sum of money for a specific…

Q: mpany owes Php 80,000 which includes the interest, to be paid one year from now by monthly deposits.…

A: In this we need to calculate the future value of growing annuity.

Q: A company borrowed an amount of 400,000 dinars for a period of four years at a compound interest at…

A: Compound Present value of interest rate 5 % for the period of 4 Years = 1/(1+r)n R = Rate of…

Question

A company that specializes in odor control
made deposits of PhP 10,000 at the end of
year 2, PhP 25,000 at the end of year 3, and
PhP 30,000 at the end of year 5. Determine
the future value (in year 7) of the deposits at
an interest rate of 8% compounded monthly.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.